Eurafric Energy Limited, weekend, debunked claims by the Federal Government on the revocation of the Dawes Island marginal field and the decision to re-award it to Petralon 54.
The marginal field is owned by a Joint Venture, involving Eurafric, Tako and Petralon.
Addressing the House of Representatives Committee on Public Petitions, Director, Department of Petroleum Resources, Sarki Auwulu, had presented some reasons, including the alleged inactiveness for 17 years.
However, in his submission sighted by Vanguard, Onoriode Odjegba, Managing Director, Eurafic Energy, faulted DPR’s claim that the field was inactive for 17 years.
Mr Odjegba, who attributed it to the restiveness in the Niger-Delta, which denied the company access to the field, stated; “Two Force Majeure, FM events of about 10 years cumulatively, severely affected field development activities from license award to date.
“The first FM event which spanned seven years from 2004 to sometime in 2011, was occasioned by militancy within the field area.
“At the height of this, Shell Petroleum Development Company also declared FM; evacuating 235 non-essential personnel from two oil fields, cutting oil production by 30,000 barrels per day.
“Similarly, our technical partner, PA Resources of Sweden declared FM as well and exited the country. This situation persisted until the government of President Umaru Musa Yar’Adua commenced the Presidential Amnesty Program which restored normalcy to the region.
“This fact was corroborated by the DPR in the Dawes Island Marginal field extension letter of 28th March 2011 when it stated: ‘Our records show that you have carried out some activities but not attained production.
“This is in recognition of the fact that there was a spate of restiveness that pervaded the Niger-Delta region in the past few years which almost paralysed exploration and production activities in the region.
“The second FM, which occurred between January and June 2018, involved the seizure of our shuttle vessel, the MT Breakthrough by the Nigerian Navy and subsequently, EFCC.”
“This hampered our ability to evacuate produced crude oil and truncated our first extended well test. The ripple effect, however, prevailed till mid-2019 when the DPR gave approval for re-execution of the extended well test.”
He also said: “Although the DPR collectively held Eurafric, Tako and Petralon liable for delay in developing the field, Eurafric wondered why the agency said Petralon has the capacity to make the field viable.”
Expressing its commitment to the development of the field, the managing director, who noted that substantial investments were made over the years, said: “In appreciation of such expenses, his predecessor (Auwulu), made an exemption for fields on stream or showing significant progress towards production during the licence extension of 2015.
“At that time, the DPR utilised a Quantitative Evaluation Criteria and Scoring Chart for assessing performance wherein Fields which scored 70 points and above-termed Fields on stream or showing significant progress towards production, was given a clean bill and granted licence approval.”
He also, said: “Following the restoration of calm in the Niger-Delta, Eurafric, together with its partners (Petralon and Tako E&P) successfully executed subsurface studies, mobilised to site and drilled a well. As a key part of the process leading to a submission of a Field Development Plan, FDP, Eurafric and partners applied for and received from DPR a permit to execute an Extended Well Test, EWT. Only after the EWT can an FDP be submitted. The licences were revoked just as the EWT was concluded.”
Eurafric described the claim that it had no financial or material investment in the asset as unfounded and grossly misleading, noting that it has funded 75 per cent of all expenses on the field to date.
However, the lawmakers reversed the award of the field to Petralon 54 Limited, stressing that DPR’s action was not fair to all parties.
The committee explained that since the DPR had admitted the JV relationship between Eurafric, Tako, and Petralon, the three parties should benefit from any re-award of the licence.
DPR had revoked 11 marginal field operators’ licences for non-performance, including Dawes Island marginal field in Oil Prospecting Lease, OPL 2006, Rivers State, in April 2020.
Reacting, Eurafric had filed a motion on notice challenging the revocation and applied for an interim injunction restraining the action.
In its June 2020 ruling, the Federal High Court in Lagos restrained the Federal Ministry of Petroleum Resources from accepting bids for eight marginal oilfields, including that of Dawes Island pending determination of the case.
But DPR had awarded the field to Petralon 54 Limited and its partners during the recent marginal oilfield bid round, a development which made Eurafric drag it before the House of Representatives Committee.
It would be recalled that the DPR had in April 2021, also revoked four Oil Mining Licences, OML, belonging to Addax Petroleum due mainly to the alleged non-development, before President Muhammadu Buhari ordered it to return them to Addax.
Vanguard News Nigeria